Google miscalculates severance payments for some Googlers
Double counting share units led to mistake, 'we have corrected' the error, says ad search titan
Google staff already reeling from the shock of mass layoffs now have another bitter pill to swallow: the shares due as part of their severance terms will, in some cases, be much lower than first thought.
Around 12 percent of the workforce, or some 12,000 Googlers, are being laid off following a dramatic downturn in ad spending that comprises the bulk of the business. Senior executives were hired rapidly in recent years and the business's new reality meant heads needed to roll, CEO Sundar Pichai said.
Yet staff are now reporting that Google had got its maths wrong when calculating the number of shares departing employees receive. In an email to employees, shared with Insider, the company says:
"First we want to apologize for an inaccurate calculation that appeared in the initial notification email. The severance package that we explained in the support site, detailed documentation and publicly was correct, but it was inaccurately reflected in the email we sent."
The content of this message was confirmed by Google. It appears the company doubled-counted the shares vesting between the point at which staff were informed of the layoffs and March 31.
In a statement, Google told us:
"As we said publicly, departing employees are eligible to receive stock and salary for their 60+ day notice period, as well as a separate severance payment, comprising salary and accelerated stock vesting for at least 16 weeks (plus 2 weeks for every year of service).
This information was also shared on our internal support site and in detailed documentation and remains 100% accurate. However, it was inaccurately reflected in a calculation in an email notification sent to employees. We have followed up and corrected the calculation — and this doesn't change the fact that all departing employees will still be eligible to receive salary and stock units for both the notice period and the severance payment, as well as their 2022 bonus, unused vacation, six months of healthcare and additional support."
However, for some in the ranks, the miscalculation means they may get thousands or tens of thousands less than first thought. "They did not outline it well in the first emails to us so tons of people were confused," one told Insider.
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A big round of redundancies was called for by institutional investor TCI Management, which said in November that Google had become bloated in recent times: headcount doubled since 2017 and grew by 37,000 from January to September last year alone.
The hedge fund wants senior management to go even further and cut 30,000 in total, as well as reduce the wage bill that it says is way higher than the industry average and improve productivity, something Google management had already tried to address last summer.
Pichai said last month in a townhall meeting that the C-suite will also feel some financial squeeze with bonuses to be cut this year.
At the start of February, Google released financial results for Q4 of calendar 2022 that showed a 1 percent rise in revenue to $76.045 billion and net profit of $13.62 billion versus $20.64 billion in the same quarter the prior year [PDF]. For 2022 as a whole, turnover was up 10 percent to $257.6 billion and net profit was $59.97 billion, albeit down from $76 billion. ®